Re: GTA takes a step forward in being part of the relocation/expansion conversation
posted at 4/20/2012 3:13 PM EDT
Great article from Stephen Brunt today on the catastrophe that is the Coyotes and the City of Glendale.
It is an unremarkable place in nearly every respect, one more iteration of bland suburban sprawl in Arizona's populous Valley of the Sun. Driving west from downtown Phoenix, in the opposite direction from the more fashionable, prosperous suburbs on that city's eastern fringe, you hardly notice it before hitting the vast, empty expanses of the Sonoran Desert.
But now Glendale, Ariz., has a place in history -- or at least in economics textbooks -- as the subject of a perfect cautionary tale. It is the town that went all-in on professional sports and lost. Big.
At press time, the city's top bureaucrat was still speaking confidently about a buyer appearing for the Phoenix Coyotes, currently a ward of the National Hockey League, and for the Jobing.com Arena where the team plays, who would presumably keep the franchise where it is, and the Glendale council had been briefed behind closed doors about recent developments. Gary Bettman also seemed particularly smug when asked about the situation on the first night of the playoffs (though smug is nearly always his default attitude).
Could happen, but of course we've heard that one before—and every time, the lack of an actual owner, or an actual owner with actual money, or a deal that could get past the watchdog Goldwater Institute without inspiring a lawsuit, somehow got in the way.
But owner or no owner, relocation or not, it doesn't really matter now. Glendale has already passed the point of no return. A city with a population of approximately a quarter of a million people is carrying a debt in excess of a billion dollars, not including a projected $30-million budget shortfall this year, and is currently contemplating which services its citizenry will be forced to do without in order to pay the bills.
That sad state of affairs relates directly to the magical thinking that directed massive public investment into the team, into the arena, into the shopping centre that was constructed around it, an elaborate pyramid scheme that fell apart for the same reason all pyramid schemes fall apart: There aren't actually enough people willing to buy the core product.
Glendale's civic guardians, led by the remarkable Elaine Scruggs (take heart Torontonians, it turns out you didn't really elect the worst, most embarrassing mayor in North America), weren't simply buying into the fastest game on ice. They were buying into the big lie about how professional sports can be an economic engine; about how they create jobs, create wealth, put your town on the map, bring life to moribund neighbourhoods, etc., etc.
There are volumes of academic literature that definitively disprove all of that. Professional sports teams are in fact relatively small businesses that, if anything, leech discretionary spending from other sectors of the economy. They create a modest number of seasonal, low paying jobs, and a very small number of extraordinarily high paying ones -- for the athletes, who inevitably leave town the minute the last game is over.
At best, a new arena can redirect commercial activity from one part of a city to another, but the truth is, everything considered, you'd be way better off spending public money on a monorail (if only Mayor Scruggs had met Lyle Lanley first…) than on housing and subsidizing a professional sports franchise.
And as to more ephemeral benefits, consider this: As a result of its other big investment in sport -- the University of Phoenix Stadium -- Glendale has played host to one of the planet's single biggest one-off sporting events, the Super Bowl, and will do so again in 2015. Did you even notice? Did it make you think differently about the place?
Now, if the Coyotes go (the NHL having pocketed $50 million in direct operating subsidies over the past two seasons), Glendale will be left with an empty arena and a mountain of debt, a vast smoking crater.
If they stay, it can only be through a sweetheart deal for the potential buyer that makes sure the NHL gets back the $170 million it paid to buy the franchise out of bankruptcy, but that wouldn't do anything to make the city whole. Though the Goldwater folks will be waiting to intervene, it's hard to imagine anyone buying the team for that much money without the benefit of some kind of public subsidy, or without being handed the arena as well for a song, or without some kind of escape clause so that, unlike the Coyotes' last owner, Jerry Moyes, they can get while the getting is good.
The mayor, who isn't running for re-election; the Glendale city manager, who is heading for early retirement; and the boneheads on the local council have left that legacy for their children, and grandchildren, and perhaps their great-grandchildren -- all to prop up a game about which most people there simply don't care.
But don't lie awake fretting about the good citizens of Glendale. They'll be just fine. Because now, they're planning on opening a casino.